Jan 27, 2011
6:12 PM SanDisk Recovers, Cheered By Q1, Year View
Posted by Tiernan Ray
On a conference call with analysts this evening following better-than-expected Q4 profit, SanDisk (SNDK) executives offered some views to cheer up the stock, which had initially traded down after the results were put out.
The company forecast Q1 revenue of $1.2 billion to $1.28 billion, comfortably ahead of the average $1.16 billion estimate of analysts. That is based on expectations for a seasonal decline in retailer NAND flash product demand, some supply constraints, and “mild” price declines. Gross product margin is expected to be similar to Q4’s 39.8%.
For the full year, the company forecast $5.3 billion to $5.7 billion in revenue, based on a “healthy” supply and demand balance, and somewhat sharper price declines than in 2010, which is above the average $5.3 billion estimate for the year.
The company forecast its gross product margin to be below the 47% achieved in 2010, in a range of 39% to 42%. Much of that will depend on the yen-dollar exchange rate and the rate at which the company ramps production of 24-nanometer chips, its Fab 5 costs, and also the degree of purchases of third-party manufacturing capacity. Product gross profit is expected to decline from 42.9% in 2010 to a range of 35% to 38%.
SanDisk shares are now up 20 cents at $51.52. |
